Discussion in 'The Economy' started by Tropo, 5th Jan, 2011.
17 Facts About China That Will Blow Your Mind
The urbanisation and rise in living standards in China and India is THE BIGGEST event in the last 1000 years. It will massively change our world.
Apart from ethical, philosophical and environmental questions (which are all important) the key question is how can we make a buck or two from it other than buying BHP?
China's repressive business reach...
" In spite of its glossy appearance, China remains an incredibly autocratic and corrupt regime that has no intention whatsoever of fostering Western democracy, and this has ramifications for Australia. 29 Dec 2010 10:00 AM
While I don’t profess to being an expert on China (very few are), the one thing I do know is that China gets extremely big wraps in the financial and economics community.
China is the world's second largest economy, and will soon be the biggest. With 1.3 billion residents, China is the world's most populace country. In numerical terms, it is, therefore, the world's deepest market. By some estimates, China is rapidly establishing a middle class that is as large as the US. Many of the world's most valuable companies are Chinese.
Australia imports more goods from China than any country. Australia also exports more goods to China than any other partner. Indeed, our economy has, for the time being, become hitched to China's fortunes in an extraordinarily intensive way.
And this looks like it will last for as long as China continues to urbanise and industrialise. But what does it mean for Australia’s stability? What are the implications of this unanticipated partnership for our future economic volatility?
What financial markets appear not to appreciate is that China is controlled by an exceedingly secretive central authority known as the Chinese Communist Party. Companies that many in the West consider ‘private’, which are listed on exchanges around the world, are, in fact, controlled by The Party.
All senior executives are appointed by The Party. The Board of Directors is determined by The Party.
The Party has its own political committee inside every private entity of consequence. And if The Party does not like your business strategy, you will change it.
Occasional glimpses of this dynamic are evinced when, for example, in recent years the CEOs of major banks and telecommunications concerns have been forced to resign and suddenly switch roles with their competitors.
The Party unilaterally decided to cultivate empathy (I am not kidding)! And, for what it is worth, The Party's pervasive influence over all listed Chinese entities is not normally disclosed in public prospectuses that investors rely on.
These and many other fascinating insights are yielded by an outstanding new book called, The Party: The Secret World of China's Communist Rulers.
It has been published by a highly respected authority, Richard McGregor, who is the current deputy news editor of the Financial Times, and previously served as the long-time Beijing bureau chief.
Distilled down, we learn that in spite of its glossy appearance, China remains an incredibly autocratic, corrupt, capricious and nationalistic regime that has no intention whatsoever of fostering Western democracy (or its related values).
In fact, the Chinese Communist Party perceives any external influence, and any notion of a free and open society, as a threat to its own choke-hold on the country.
What I took away most from this work was a meme that I have written about here before. In many ways, Australia's economic trajectory is more unknowable and subject to change than it ever has been before.
That is the cost associated with capitalising on the Middle Kingdom's ascendancy."
Personally I am not interested in China/India at all.
If you put a lot of money in BHP shares, you can make a few $$$ if you sell at the right time !!
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